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Capita VRIO / VRIN Analysis | Assignment Help
What is VRIO / VRIN Analysis ?
VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence.
VRIO is a resource focused strategic analysis tool.
To build a sustainable competitive advantage the resources that –casename— needs to be valuable, rare, and difficult to imitate. Secondly the –casename— needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. VRIO analysis can help organizations such as Capita to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Capita? Defining Valuable in VRIO
A resource or capability is considered valuable for Capita , if it allows the
Capita to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Capita to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Capita.
What are Rare Resources for Capita? Defining Rare in VRIO
In an industry that Capita operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Capita require rare resources to compete in the industry. If Capita don’t have rare resources that are required to succeed in the industry then Capita won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Capita competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Capita? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Capita for certain period of time as all the competitors are going to try to imitate or replicate that resource. A sustained competitive advantage emerges, if the resource is difficult to imitate by the competitors. Capita can create inmitability by innovating on the product side, reducing pain points on service delivery, and having an effective post sales servicing strategy.
Check out the SWOT analysis of Capita
What is a Organization for Capita? Defining Organization in VRIO
Even if the Capita has all the valuable resources that are both rare and difficult to imitate, it won’t automatically result into a sustainable competitive advantage. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. If Capita is not organized based on its strengths then it won’t able to exploit all the resources that it possesses.
Resources | Value | Rare | Imitation | Organization | Competitive Advantage |
---|---|---|---|---|---|
Product Portfolio and Synergy among Various Product Lines of Capita | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Financial Resources of Capita | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Capita has reasonably sound financial position | Capita has relatively sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Capita to thwart competition | Yes, IPR and other rights are rare and competition of Capita will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing Strong Competitive Advantage |
Customer Community of Capita | Yes, as customers are co-creating products | Yes, the Capita has able to build a special relationship with its customers | It is very difficult for Capita competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Capita customers community ecosystem | Providing Strong Competitive Advantage |
Pricing Strategies of Capita | Yes, Capita has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Capita with a Temporary Competitive Advantage |
Brand awareness of Capita products and services | Yes, the brand awareness of Capita products are high | Yes, Capita has one of the leading brand in the industry | No | Capita has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for Capita products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Access to Cheap Capital for Capita | Yes, as a leading player in the industry and current macro economic conditions, Capita has access to cheap capital | No | Can be imitated by the competitors of Capita | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at Capita | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Capita | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Capita strategy is built on successful innovation and localization of products | Yes, as talent is critical to firm's growth | Difficult to imitate for the current competitors of Capita | To a large extent yes | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Capita in delivering lower costs | No | Can be imitated by competitors of Capita but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand Positioning of Capita in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Capita Customer Network and Loyalty | Yes, 23% of the customers contribute to more than 84% of the sales revenue | Yes, firm has invested to build a strong customer loyalty | Has been tried by competitors but none of them are as successful as Capita | Capita is leveraging the customer loyalty to good effect | Provide Capita medium term competitive advantage |
Capita SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis
Books and References
Ahir Gopaldas and Anton Siebert (2022 July August) "What You’re Getting Wrong About Customer Journeys",
Harvard Business Review , 92
Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86
Dyer, J. H., & Hatch, N. (2004). Using Supplier Networks to Learn Faster. Sloan Management Review, 45(3), 57–63
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120
Dyer, J. H., Kale, P., & Singh, H. (2004, July–August). When to ally and when to acquire. Harvard Business Review, 109–115
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